Physicians' Costs for Chemotherapy Drugs

EXECUTIVE SUMMARY:

This final report summarizes the results of our review of the Health Care Financing Administration (HCFA) proposal to change the methodology used to reimburse for chemotherapy drugs. We found that, for the physicians surveyed, the 13 chemotherapy drugs can be purchased at amounts below the average wholesale price (AWP) used to set the reimbursement rate and that AWP is not a reliable indicator of the cost of a drug to physicians. We recommended that HCFA define reimbursement policy to encourage physicians to purchase drugs using the most economical means available, establish uniform survey criteria to be used by carriers to determine estimated acquisition cost and set uniform policy for carriers' evaluation of drug inventory, waste and spoilage costs. In addition, HCFA should revise its coding and reimbursement systems to pay for drugs based on the dosage actually administered.